Federal Stafford Loan Plain Language Disclosure
This notice summarizes information concerning your loan. Please
read this notice carefully, print the document if it has been
delivered in an electronic form, and maintain a hard copy in a safe
place. If you have questions about your loan, contact your lender.
1. General - You are receiving a Federal Stafford Loan to help
cover the costs of your education. You must repay this loan. You
are responsible for repaying this loan even if you are dissatisfied
with your education, do not complete it, or cannot find work in
your area of study. Borrow only the amount you need.
By accepting your loan proceeds, you are certifying, under penalty
of perjury, that if you have been convicted of, or have pled nolo
contendere or guilty to, a crime involving fraud in obtaining
federal student assistance under Title IV of the Higher Education
Act of 1965, as amended, you have completed the repayment of
such funds to the U.S. Department of Education, or to the loan
holder in the case of a Title IV federal student loan.
2. Loan Cancellation - You may cancel or reduce the amount
of your loan by writing to your school or lender before your lender
sends your loan money to your school. There are two ways to
cancel all or part of your loan after your loan money is sent to
your school: you may contact your school within 14 days of the
date your school informs you they have applied your loan to your
account, or you may pay back all or a part of your loan within 120
days of the date your lender sends your loan money to your
school.
3. Federal Stafford Loan Master Promissory Note (MPN) —
If you continue to attend a participating school located in the
United States, you may receive multiple loans under the same
MPN for up to 10 years. You may write to your lender to stop
loans from being made under your MPN. You will need to sign a
new MPN if you want to change your lender or if you transfer
between a Federal Family Education Loan school and a Federal
Direct Loan school.
4. Loan Amount - There are annual and total limits on the
amounts you may borrow, as explained in the Borrower’s Rights
and Responsibilities Statement you previously received. The total
amount you borrow cannot be more than these limits. Your school
determines the amount you are eligible to borrow using federal
guidelines.
Effective for Federal Stafford Loans first disbursed on or after July
1, 2007, there are increased annual loan limits for certain
categories of students, as shown in the following chart:
DEPENDENT UNDERGRADUATES Subsidi Total
zed
(Subsidized
&
Unsubsidize
d)
First Year $3,500 $3,500
Second Year $4,500 $4,500
INDEPENDENT
UNDERGRADUATES
(and dependents whose parents are
unable to borrow under the PLUS
program)
First Year $3,500 $7,500
Second Year $4,500 $8,500
GRADUATE & PROFESSIONAL $8,500 $20,500
STUDENTS
5. Use of Loan Money - You may only use your loan money to
pay educational expenses (e.g., tuition, room, board, books) at the
school that certified your loan eligibility. If you accept this loan,
your eligibility for other student assistance may be affected.
6. Origination Fee and Federal Default Fee - Federal law
requires an origination fee and a federal default fee for each loan
made under this MPN. (Before July 1, 2006, the federal default fee
was called a guarantee fee or insurance premium.) The law
specifies the maximum amount of each fee and authorizes both
fees to be deducted from your loan amount. If you cancel or
repay all or part of your loan within 120 days of the day your
lender sends your loan money to your school, your origination and
federal default fees will be canceled or reduced.
7. Change of Status or Address - You must tell your school
and/or lender if you stop attending school, no longer attend school
on at least a half-time basis, or transfer to another school. You
must also tell your lender any time you change your address,
telephone number, e-mail address, name (e.g., maiden name to
married name) or employer, or if the address or telephone number
of your employer changes.
8. Repayment - You must repay the full loan amount, and all
interest on your loan, generally within 10 years. You will receive a
6-month grace period that starts the day after you leave school or
drop below half-time enrollment status at your school. You do not
have to make payments during your grace period. You must make
payments after your grace period ends according to the schedule
provided by your lender. Your lender will give you the choice of a
Standard Repayment Plan, Graduated Repayment Plan, Income-
Sensitive Repayment Plan or, if you are eligible, Extended
Repayment Plan. You may request a change to your repayment
plan at anytime, but your lender may limit you to one change in
your repayment plan each year. These plans are designed to give
you flexibility in meeting your repayment obligation. You may
make loan payments before they are required, or in amounts
greater than required, at any time without penalty. When you pay
back your loan in full, the current holder does not have to send
you the original MPN but may instead send you a notice telling
you that you have paid off your loan. You should keep this notice
in a safe place.
9. Interest - Loans with a first disbursement on or after July 1,
2006, have a fixed interest rate of 6.8%. Loans made prior to that
date have a variable interest rate that may change each year on
July 1 and that will never be more than 8.25%. Some variable
interest rate loans have an interest rate that is lower during in-
school, grace, and deferment periods, and higher during
repayment and forbearance periods. Interest is charged on the
unpaid principal amount. Interest charges begin on the date the
loan is disbursed and end when the loan is paid in full. For
subsidized loans, the federal government pays your interest
charges while you attend school at least half time, for 6 months
after the day you leave school or drop below half-time enrollment
status at your school, and while you have a deferment on your
loan. You must pay all other interest charges on your subsidized
loan. For unsubsidized loans, you must pay all interest charges.
You agree that the lender may add interest charges to your loan
amount, as provided by law, if you do not make payments of
interest. Since the federal government does not make any
interest payments for you on unsubsidized loans, you will repay
more interest on unsubsidized loans than on subsidized loans.
10. Late Charges and Collection Costs - Your lender may
collect a late charge from you if you do not make any part of a
payment within 15 days after it is due. Your lender may only
collect one late charge for each payment, no matter how many
days the payment is late. Your lender may also collect from you
any other charges and fees involved in collecting your loan.
11. Loan Consolidation - If you are no longer enrolled in
school as at least a half-time student and you are in the grace
period or in the repayment period on your loan, you may be
eligible to consolidate all of your eligible federal education loans
into one loan. Consolidating your loans may give you up to 30
years to pay them back and may lower your monthly payments;
however, you may be repaying your loans for a longer period and
pay more interest. Contact your lender for more information
about consolidating your loans.
12. Deferments - You do not have to make payments in certain
circumstances. For example, you will not have to make payments
while you are attending school at least half time or for up to 3
years while you are unemployed. For a complete list of
deferments, and all documentation and eligibility requirements,
please refer to your Borrower’s Rights and Responsibilities
Statement and any supplemental information you may receive.
Effective July 1, 2006, for loans with a first disbursement made on
or after July 1, 2001, an additional deferment is available for a
period of up to three years during which a borrower is serving on
active duty during a war or other military operation or national
emergency, or performing qualifying National Guard duty during a
war or other military operation or national emergency. The federal
government pays the interest on subsidized loans during periods
of deferment. You must pay the interest on unsubsidized loans
during deferment periods, or it will be added to the principal
amount of the loan. If interest is added to the principal amount,
you will then pay interest on the larger amount. Having interest
added to the principal amount of your loan may also cause your
monthly payment amount to increase.
REVISED 02-16-2007
 Federal Stafford Loan Plain Language Disclosure
13. Forbearance - If you cannot make scheduled payments
and do not qualify for a deferment, your lender may allow you to
temporarily make smaller payments or temporarily stop making
payments. This is called a forbearance. Interest continues to be
charged on your loan during forbearance. The lender must grant
you a forbearance in certain cases, as described in your
Borrower’s Rights and Responsibilities Statement.
14. Loan Discharge - Your loan will be discharged (forgiven)
when (i) acceptable documentation of your death is given to your
lender, (ii) you cannot complete a course of study because your
school closes, (iii) your school falsely certifies your loan eligibility,
or, effective July 1, 2006, (iv) a loan in your name was falsely
certified as a result of a crime of identity theft.
If you provide acceptable documentation that you are totally and
permanently disabled, your loan is assigned to the Department of
Education and conditionally discharged for up to three years. If
you meet certain requirements during and at the end of the
conditional period, your loan will be discharged.
Your loan will not automatically be discharged in bankruptcy. Your
loan may also be discharged up to the amount of any refund that
your school should have made, but did not send to your lender.
15. Credit Bureau Notification - Information about your loan
will be reported to one or more national credit bureaus.
Information will include the disbursement date, amount, and
repayment status of your loan (for example, whether you are
current or behind schedule in making payments).
16. Default and Acceleration — If you default on your loan,
that fact will be reported to all national credit bureaus. All unpaid
amounts and collection fees on your loan will become immediately
due and payable. You may be sued, your wages may be garnished,
you may lose federal payments, and/or your tax refund may be
withheld. You agree to pay reasonable collection fees and costs,
plus court costs and attorney fees. You may face other serious
consequences.
17. Sale or Transfer of Your Loan - Your lender may sell or
assign this loan without your consent and without selling or
assigning any of your other loans. The sale or transfer of your
loan does not affect your rights and responsibilities with respect to
the loan. You will be given the name, address, and telephone
number of any new owner of your loan, if the change in ownership
means you must send payments to a new address.
18. Department of Defense Repayment Program - Under
certain circumstances, military personnel may have their loan(s)
repaid by the Secretary of Defense. You should address any
questions you have to the local service recruiter. This is a
recruiting program and generally does not pertain to prior service
individuals or those not eligible for enlistment in the Armed
Forces.
19. Controlling Terms and Conditions - This Disclosure
summarizes information concerning your loan. Please refer to
your Federal Stafford Loan MPN, Borrower’s Rights and
Responsibilities Statement, and loan-specific disclosure for the
complete terms and conditions of your loan. Except as specifically
stated in this Disclosure, those documents govern the terms and
conditions of your loan.

REVISED 02-16-2007